TIDMALGW
RNS Number : 6769R
Alpha Growth PLC
04 March 2019
4 March 2019
Alpha Growth plc
("Alpha", or the "Company")
Corporate Update
Alpha Growth plc (LSE: ALGW), the financial services specialist
in the growing Senior Life Settlement ("SLS") asset class will hold
a General Meeting at 8:00am today and in advance of that is pleased
to provide a general corporate update. Going forward the Company
plans to provide a general quarterly update starting June 30(th)
and when necessary to report material events. Shareholders should
take comfort in knowing that your directors and executives are
continuously working to create a world class asset manager.
Since the 2017 IPO, the Company has focused on establishing
itself and building its team and brand in the longevity asset
space. The Company was able to secure an initial mandate, as
announced 20 December 2017, with a private wealth manager known to
the executives, who intended to issue a EUR15 MM bond soon after
the IPO. The proceeds received being invested into longevity
assets. However, the wealth manager postponed the offering due to
their own internal reasons, but the mandate remains in place with
the wealth manager now considering the deployment of its client
risk capital into the open-ended fund (see below) as a more
relevant structure for its clients to invest in longevity
assets.
In February of 2018, Alpha in conjunction with one of its
advisers, a Big Four accounting firm, hosted a roundtable meeting
of senior investment officers from the top 10 UK insurance
companies to introduce and discuss the Company's proposed hybrid
security investment product. Pursuant to this exercise two of the
insurance companies are in continuing engagement with us, one of
which has now matured to very advanced stages and hopefully towards
a closing. This mandate contemplates a nine-figure sum to be
allocated for life settlements.
Simultaneously, Alpha has been and continues to be in
discussions with certain ultra-high net worth ('UHNW') investors
and family offices, both in the UK and wider Europe, with regards
to separate managed account ('SMA') investments to facilitate their
exposure to SLS assets. These SMAs contemplate minimum allocations
of $10 million. On 7 June 2018, Alpha announced that it was
collaborating with Devonshire Warwick in order to facilitate
introductions and distribution to UHNW and family office investors
which to date has generated over 60 qualified leads and 20 direct
meetings to date. The Company continues to receive leads from
Devonshire Warwick. The Company prioritises discussions with these
leads by the readiness of their allocation to advance them to an
ultimate allocation. The internal process of allocating to a new
manager is extensive and time consuming and taking longer now than
ever before. Alpha's LSE listing and quality of its team, are
providing excellent visibility and transparency to these
investors.
In June 2018, the Company presented at The Alternative
Investment Conference in Zurich Switzerland, organized by Swiss
Financial Services. At this conference the Company's SMA product
was pre-screened by investors and meetings were requested by them
with the Company. The CEO and COO of the Company met with and spoke
to over 10 pre-screened and qualified investors. From those
conversations, two remain actively engaged and are advancing. The
Company has been invited back to attend this year's conference in
June and asked to present to a larger group. The request of an
additional presentation was precipitated by their clients desire to
seek alternative investments that are uncorrelated. The continuity
of the Company attending these select events, supports the
relationship building and ultimate creation of mandates.
On 17 July 2018, Alpha announced the strategic acquisition of
Alpha Longevity Management Limited ("ALM"), a dormant BVI
registered licensed investment manager. Through its joint venture
with SL Investment Management Limited of Chester, England, ("SLIM")
(as announced on 21 November 2018), the Company will be advising an
open-ended fund that will invest in life settlements. It plans to
provide this advice through ALM. The Alpha Group (hereafter the
"Group") and SLIM are excited by the prospects of the new
open-ended fund which is set to be seeded by an existing pool of
life settlements and cash worth approximately $10 million. The fund
is expected to be launched in March 2019 subject to final
regulatory approval by the Cayman Island Monetary Authority. This
provides an immediate platform for the Group to springboard its
marketing efforts which commenced shortly after the joint venture
was announced. These marketing efforts are in addition to the SMA
and Hybrid discussions.
So far in the year to date, the Group has focused on closing and
creating fee generative mandates. Following the acquisition of
Colva we are now already generating revenue, and in the very short
term we expect to generate material revenues from the fund which
will launch this month.
The Directors continue to believe that as investors continue to
seek yield and diversification of their investment portfolios, the
market for advisory services for SLS Assets will grow.
Institutional investors seeking this diversification are expected
to seek out experts rather than build in-house teams and this has
been proven by the discussions with prospective investors.
When compared to public equities, fixed income, currency
trading, real estate, and private equity, SLS Assets are a small
part of the investment spectrum, while still having multi-billion
dollars in market volume. Additionally, the Asset class is
particularly complex. Hence, the Company believes that it is more
cost effective for these investors to seek external advisory
assistance and therefore is well positioned to take advantage of
these opportunities.
The assessment of the Group's likely success in winning
contracts continues to be based on the Directors' knowledge of the
industry as it currently stands. However, the Group is reliant on
each such prospective client's internal timings and processes. The
fees generated from the Group's initial contracts will depend on
the services required for each contract and discussions with the
clients over fee structuring, including success-based fees. As can
be appreciated, the quantum of the allocation being discussed with
each prospect is significantly sufficient whereby the fees
generated more than support the cost of deliverables required. The
directors believe that the capital expended to date has been
foundational in creating the current and future business
development opportunities. The management and directors continue to
keep costs low and working towards a cash flow positive
position.
The Group continues to build its team with the acquisition last
month of Colva and its principal Rajiv Rebello, who will be the
Group's Chief Actuary and Director of Investment Analytics. By
having our own in-house actuary, we are able to respond to client's
need in a timely manner and build Alpha's intellectual property. We
will also be announcing in the coming days further additions that
will strengthen our reputation and offerings.
The Directors thank our shareholders for their continued
support.
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
For more information, please visit www.algwplc.com or contact
the following:
Alpha Growth plc +44 (0) 20 3959 8600
Gobind Sahney, Executive Chairman info@algwplc.com
-----------------------------
Vox Markets (Digital IR) +44 (0) 203 865 0130
-----------------------------
Abraham Darwyne content@voxmarkets.co.uk
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Novum Securities Limited (Corporate
Broker) +44 (0) 207 399 9400
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Colin Rowbury crowbury@novumsecurities.com
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About Alpha Growth plc
Specialist in Longevity Assets
Alpha Growth plc is a financial advisory business providing
specialist consultancy, advisory, and supplementary services to
institutional and qualified investors globally in the multi-billion
dollar market of longevity assets. Building on its well-established
network, the Alpha Growth Group has a unique position in the
longevity asset services and investment business, as a listed
entity with global reach. The Group's strategy is to expand its
advisory and business services via acquisitions and joint ventures
in the UK and the US to attain commercial scale and provide
wholistic solutions to alternative institutional investors who are
in need of specialised skills and unique access to deploy their
financial resource in longevity assets.
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